USING DISCOUNT CHANNELS

“Our job is to take the emotion out of discounting” is a line I use when talking with industry peeps about our consulting client, Goldstar. And emotion should never play into your decision to use discount channels to move tickets when making money, reaching an audience, and filling seats is the goal.

At the Pollstar Conference a few months back, a national promoter told me that “if I have to use Groupon or Goldstar, that means I didn’t do my job”. What? Do all of your shows sell-out or are they even projected to? If you are like the rest of us, the answer is no. In many of those cases, there is an audience that doesn’t even know your show is coming to town, so why not use all the tools at your disposal? Once the act hits the stage, every empty seat means $0 in revenue…and not just for that seat.

Shouldn’t we be counting the zeros when average ticket price tells us nothing? We should be measuring revenue per seat like the airlines do. For instance, if the Jim Lewi Band played a 15,000 seat arena and only sold 4-tickets (to my family of course) at $500, the average ticket price would be $500 even though a majority of the house is empty. But by counting your unsold tickets as $0, you find out how much each seat contributes to your bottom line. Based on the example above with a 15,000 cap, your average ticket price is $500, but your revenue per seat is only $0.0333. Revenue per seat tells us what we really need to know.

In music, many tell us of the perception that the show is a dud if you’re listing tickets through a discount channel. The truth, this “perception” is only in the eyes of the business, not the fan. It is an emotional response we give based on protecting the act’s brand and value in the market, but most fans aren’t doing research to find the best deal like they would with other products. Maybe someday there will be a “Kayak for live entertainment” where a consumer can search for the best deal, just not yet. Goldstar, Groupon, Living Social, etc., are all marketing avenues that need a new measurement scale. CPM (cost per thousand people reached) is generally how marketing is measured. It doesn’t apply here as there is an actual sale, so the more tickets sold, the higher your CPM goes. It should be going down.

The only way you will really know is to “test and measure” results. Don’t assume that you are hurting your show or act by discounting (unless it is to your own list) when chances are you are doing the opposite. There is a lot of data to back this up. When done properly, using a discount channel helps move the primary market. If you haven’t tried it yet, you should. Otherwise, you are just guessing…and probably wrong.

Advertisements

Tags: , , , , , , ,

2 Responses to “USING DISCOUNT CHANNELS”

  1. Jon Topper Says:

    I disagree with you Jim, If you continuously use discount services to discount the tickets you are training the fan to only look at those places to buy tickets. Anytime I am looking to go out and eat I look at groupon to see who has a deal, I do not think people pick their music according to has a deal going on unless it is a soft ticket place where food is just as important as the show.

    When I see a band go on sale through Groupon in Buffalo I think to myself I have plenty of time to decide if I want to go see that band. Not “Oh shit I have to grab a ticket”. I bought my Rush ticket the day they went on sale, If they went on sale through Groupon I would have waited and not worried so much about spending the cash now.

    The real issue is making it easier and harder at the same time for a fan to buy a ticket, The internet is easy but it takes away from a part of the concert experience. Record Store day has brought back vinyl and making it fun to go browse music again. Outlets should be brought back to record stores and some shows should only go on sale through those outlets. Bring back the experience we all had when we were kids where the show started 2 or 3 months before it happened.

    • jimlewi Says:

      See Topper, emotion from the business. So far, the numbers don’t support what you are saying…and the business Groupon was built on like local restaurants are falling off while live entertainment grows. Meanwhile, cannibalization sits at around 3%. That may change over time but for now,it helps not hurts your primary market.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: